Designed to provide broad exposure to the Healthcare - Biotech segment of the equity market, the Invesco Dynamic Biotechnology & Genome ETF (PBE) is a passively managed exchange traded fund launched on 06/23/2005.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Healthcare - Biotech is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.
The fund is sponsored by Invesco. It has amassed assets over $242.10 M, making it one of the average sized ETFs attempting to match the performance of the Healthcare - Biotech segment of the equity market. PBE seeks to match the performance of the Dynamic Biotechnology & Genome Intellidex Index before fees and expenses.
This is comprised of stocks of 30 U.S. biotechnology and genome companies. These are companies that are principally engaged in the research, development, manufacture and marketing and distribution of various biotechnological products, services and processes and companies that benefit significantly from scientific and technological advances in biotechnology and genetic engineering and research.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.59%, making it one of the more expensive products in the space.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Healthcare sector--about 100% of the portfolio.
Looking at individual holdings, Bio-Techne Corp (TECH) accounts for about 5.09% of total assets, followed by Amgen Inc (AMGN) and Incyte Corp (INCY).
The top 10 holdings account for about 45.99% of total assets under management.
Performance and Risk
Year-to-date, the Invesco Dynamic Biotechnology & Genome ETF return is roughly 11.81% so far, and is down about -11.00% over the last 12 months (as of 07/16/2019). PBE has traded between $43.44 and $60.27 in this past 52-week period.
The ETF has a beta of 1.46 and standard deviation of 23.96% for the trailing three-year period, making it a high risk choice in the space. With about 30 holdings, it has more concentrated exposure than peers.
Invesco Dynamic Biotechnology & Genome ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, PBE is a sufficient option for those seeking exposure to the Health Care ETFs area of the market. Investors might also want to consider some other ETF options in the space.
SPDR S&P Biotech ETF (XBI) tracks S&P Biotechnology Select Industry Index and the iShares Nasdaq Biotechnology ETF (IBB) tracks Nasdaq Biotechnology Index. SPDR S&P Biotech ETF has $4.41 B in assets, iShares Nasdaq Biotechnology ETF has $7.27 B. XBI has an expense ratio of 0.35% and IBB charges 0.47%.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Invesco Dynamic Biotechnology & Genome ETF (PBE): ETF Research Reports
iShares Nasdaq Biotechnology ETF (IBB): ETF Research Reports
SPDR S&P Biotech ETF (XBI): ETF Research Reports
Bio-Techne Corp (TECH) : Free Stock Analysis Report
Incyte Corporation (INCY) : Free Stock Analysis Report
Amgen Inc. (AMGN) : Free Stock Analysis Report
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